CAR hire companies have been put on notice after the consumer watchdog this week forced Hertz Australia to repay clients for making them pay to fix existing damage to vehicles they had rented.
The Australian Competition and Consumer Commission this week accepted a court enforceable undertaking from Hertz Australia after an investigation into complaints from customers between 2013 and 2015.
Through its investigation, the ACCC also found that the actual repair cost quoted to the customer was inflated as Hertz received repair and spare parts discounts that it didn't pass on.
Hertz has agreed to refund affected customers after accepting its actions may have contravened Australian consumer law, citing the clause on misleading and deceptive representations.
It also agreed to review its procedures to ensure that existing damage to vehicles is properly assessed prior to being rehired.
The case against Hertz follows a broad investigation by the ACCC into the vehicle rental industry.
This includes allegations of misleading vehicle rental pricing and charging, as well as unfair contract terms in standard rental agreements.
It comes on the heels of action against Europcar Australia over allegations of unfair contract terms and misleading advertising of its 'extra cover' products. A judgement on this matter is yet to be handed down.
ACCC deputy chair Dr Michael Schaper says the decision against Hertz should act as a warning to the car hire industry.
"This case serves as a message to vehicle rental companies that they must have robust compliance procedures in place to ensure they do not contravene the Australian consumer law by incorrectly charging customers for damage they are not responsible for," Schaper says.
"Vehicle rental companies must also ensure that they are transparent and accurate in communicating with their customers about the charges they are applying for vehicle rentals and repairs."
Among the undertakings agreed to by Hertz is that it will conduct a thorough damage review processes prior to charging customers for suspected new vehicle damage. The review will aim to confirm whether the damage was pre-existing or whether it was existing 'fair wear and tear'.
Hertz also will make improvements to its damage recording procedures to minimise both the risk of charging for pre-existing damage and for the overcharging of vehicle repairs.
It is also engaging an independent external auditor to monitor its compliance with the undertaking.
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